FAQ Series: How Do I Tackle My Healthcare as a 1099 Employee with Perfusion Life?
One of the most common types of questions we get at Perfusion Life is about the conversion from full time employee to 1099 independent contractor. The expectation may be that the associated costs will be prohibitive but time after time people are shocked at how inexpensive it can be. Today we will focus on the healthcare component of the transition to the Perfusion travel life.
What are my options for Healthcare?
Option 1: Enroll Under a Spouse or Partner
Fortunately, there are several avenues to explore when looking for healthcare as a 1099 independent Perfusion contractor. If you have a spouse or partner who already has an insurance policy, adding yourself to the policy is a simple way to gain healthcare. It may be beneficial to look into the enrollment periods for this process though, since many plans only allow you to make changes during their enrollment period. It is also a good idea to compare the cost of joining your spouse or partner’s plan versus enrolling in an individual plan. You may find the cost of the plan and copay structure to be in your favor with an individual plan. The key is to lay both options out and carefully compare them and then decide what works best for you.
Option 2: Healthcare Marketplace
The Affordable Care Act led to the creation of the Healthcare Marketplace which has vastly simplified the process of purchasing insurance for individuals. You will have to wait until the enrollment period to sign up (Nov-Dec) unless you have a qualifying life event (moving to a new state, new child, or change of employment). The other big advantage of the Healthcare Marketplace is that you can select how robust you would prefer your coverage to be. If you feel like you may potentially have heavy medical expenses coming up, you may go for the Platinum or Gold plans. If you don’t expect to use your healthcare plan often and just wish to protect against a catastrophic event, then you can consider the lower cost plans such as the Bronze or the Silver level.
Option 3: Contact Providers Directly
Another option would be to contact the providers directly such as Blue Cross and Blue Shield. Oftentimes, their service will not cost anymore if you go through them instead of the Healthcare Marketplace. This option is great if there is a specific provider you wish to be covered under. Finally, you could also work with an Insurance Agent that specializes in healthcare local to your area. Often times, these experts will be a great resource to help you navigate your options.
Option 4: Part Time Employment
Another option available would be to maintain part time employment that allows for you to acquire healthcare through your part time employer. Several 1099 contractors commit to a local hospital part time and utilize their free time to travel. This could end up being the best of both worlds for some folks but causes some loss of flexibility when traveling due to reduced availability.
Option 5: Coverage Through Other Organizations
Some professional membership groups provide additional options for healthcare. If you are in NY, take a look at the Freelancers Union. In fact, they have expanded to offer national membership so you may be eligible for their coverage where you currently live. There is also Affiliated Workers Association which may provide another good alternative to traditional health insurance.
Advantages to 1099 Employment
A major advantage of becoming a 1099 contractor is the fact that you become your own “business.” Thus, you can now write off many expenses that you were not able to claim when you were a W2 employee. For example, you can deduct your health insurance from your taxes in addition to any travel related expenses. Your home office and associated expenses can be written off. A more advanced option, would be to incorporate yourself and become an S-Corp to reduce your tax burden. This change would shift you from an individual tax rate to a corporate tax rate which is oftentimes more favorable to independent contractors in the health field.
The transition from W2 employee to an independent 1099 contractor can appear to be a daunting process. Like most things in life, if there is some degree of difficulty to accomplish the task, oftentimes there are worthwhile rewards on the other side. The freedom found in independent employment is life changing and cannot be overstated. At Perfusion Life, we are committed to providing the tools and knowledge you need to find you own PERFUSION LIFE so you can write your own story.